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<keyword id="6354553" type="COMPANY" weightage="100" keywordseo="real-estate">Real Estate</keyword> sector has been stagnant and unregulated for years now. Rising prices of property, delayed construction, no clarity on Foreign Direct Investment and REITS, ghost buyers are some of problems crippling the growth of the sector. But with the various ambitious projects announced by the new Modi Government there’s a silver lining. As per recent government data, economic growth reached 7.4% in the second quarter of the current financial year, riding on a spike in manufacturing and a pickup in investment. 

	Where it stands?
 Globally positioning India as an investment destination and improving India’s diplomatic and trade relation, Narendra Modi’s foreign stints have helped India attract more <keyword id="44528" type="ORGANIZATION" weightage="100" keywordseo="FDI">FDI</keyword>. From the nations he visited during the financial year 2014-15, India received FDI of USD 19.78 billion. Moreover, FDI in India increased by 27% in 2014-15 to USD 30.93 billion, said Anuj Puri, Chairman and country head at JLL India in his blog. But a recent <keyword id="6355001" type="CITY" weightage="100" keywordseo="FICCI">FICCI</keyword> survey of the year 2015 (Impact of FDI reforms in the Indian real estate sector) shows how disoriented the sector still is. Though there has been overall growth in FDI in the sector, FDI in construction development sector has declined over the past few years. The following table shows that. 

	
 

	Overall sentiment happy
 Still revival hopes are high! The real impact of latest FDI liberalisation measures on foreign <keyword id="6362476" type="ORGANIZATION" weightage="100" keywordseo="investments">investments</keyword> in Indian real estate will be reflected over a period of time, the industry feels, as per the survey. 

	1. Industry is happy and satisfied with current FDI reforms in construction development sector 
 

	Majority are happy with the recent steps of the Central Government and are satisfied with the policy development. 
 

	2. Increased confidence and optimism in industry towards future flow of FDI in real estate 
 Industry has shown high level of confidence and optimism towards future flow of <keyword id="136566" type="UNKNOWN" weightage="100" keywordseo="foreign-capital">foreign capital</keyword> into realty sector. They feel that FDI reform measures will certainly increase flow of FDI into realty sector in coming months. 

	3. Commercial &amp; Retail and Residential real estate will gain significantly from the liberalisation of FDI in the sector
 

	4. 100% FDI under automatic route in completed projects
 

	100% FDI under automatic route in completed projects for operation and management of townships, malls/shopping complexes and business centres is a significant step taken by the Government, the industry feels.
 

	What more should be done in the upcoming <keyword id="2783177" type="UNKNOWN" weightage="100" keywordseo="Budget-2016">budget 2016</keyword>?
 

	1. Quick implementation of the Real Estate Regulatory Bill (RERA) to enable the <keyword id="46631" type="UNKNOWN" weightage="100" keywordseo="Realty-market">realty market</keyword> to attract FDI 

	2. Government of India should bring more clarity over the entry and exit norms and processes to be followed by investors. 
 

	3. Both Centre and State must work together to ensure removal of bottlenecks for faster implementation of reform measures for foreign investments in real estate. 
 

	4. Government of India could also consider a reduced lock-in-period applicable for FDI investments from 3 years currently to 1-2 years to further enhance investor interests. 
 

	The real estate industry is maturing. There is a wedge between demand and supply of housing. However, with increased market transparency, this demand/supply mismatch can offer immense opportunities for developers and investors alike. But a well regulated and consolidated industry is not a near future dream. 
	 
	(Image credits: FICCI, indiatimes)

Budget 2016: Impact of FDI in real estate sector and future expectations

<keyword id="6355261" type="POSITION" weightage="20" keywordseo="Finance-minister">Finance minister</keyword> <keyword id="42575" type="PERSON" weightage="60" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> on Wednesday announced the abrogation of Foreign Investment Promotion Board (<keyword id="6360345" type="ORGANIZATION" weightage="60" keywordseo="FIPB">FIPB</keyword>), a body that clears proposals envisaging foreign investment up to Rs5,000 crore. 
 
<keyword id="44528" type="ORGANIZATION" weightage="20" keywordseo="FDI">FDI</keyword> and FIPB 
 The FIPB (Foreign Investment Promotion Board) is the designated institution which considers the FDI proposals that require government approval. It likewise concedes composite approvals involving foreign investment/technology. FIPB is situated in the Department of Economic Affairs, Ministry of <keyword id="25455" type="ORGANIZATION" weightage="60" keywordseo="finance">Finance</keyword> and the Finance Minister is in charge of the FIPB. According to the June 2016 FDI policy revision, the FIPB can give suggestions of FDI proposals below Rs 5000 crore to the Minister of Finance for consideration 
 
India is having a well-designed Foreign Direct Investment control administration. FDI is regulated through various norms. A minimum lock in period, minimum capital for investment, sectoral limits and in particular control of passage into approval/automatic route are the vital regulations. 
 
For the situation of entry regulations, FDI section is made under two classifications – automatic route and approval route. Approval from the government is compulsory for some sort of investment. For this, approval institutions are made. The Foreign Investment Promotion Board is the most imperative approval body as it can consider FDI below Rs 5000 crore. Over this sum, the Cabinet Committee on Economic Affairs is the approval authority. 
 
What FIPB does 
 
It is entirely evident that the element affirms foreign investment proposals; it additionally audits FDI strategies, investigates the implementation of various proposals passed. This, as well as take up exercises that encourage FDI into the nation, for example, establishing contracts with international organizations and furthermore inviting them to invest in India. 
 
FIPB was initially constituted under the Prime Minister's Office (PMO) in the wake of the economic progression drive of the mid 1990s. The board was reconstituted in 1996 with exchange of the FIPB to the Department of Industrial Policy and Promotion (DIPP). 
 
It was again transferred to the Department of Economic Affairs, under the ministry of finance, in 2003.

It becomes easy to invest in India with the abolishment of FIPB

<ul><li>The latest <keyword id="722308" type="PERSON" weightage="20" keywordseo="World-Investment-Report">World Investment Report</keyword> showed India dropping a spot to 10th, in the list of top FDI receiving countries.</li><li>India’s witnessed 6% growth in FDI, to reach $42 billion in 2018.</li><li>Global FDI inflows slipped by 13%, from $1.5 trillion to $1.3 trillion, South Asia witnessed 3.5% increase in FDI inflows.</li><li>China, which retained the number two position, received the highest foreign inflows among the developing countries at an all time high of $139 billion, a growth of 4%. </li></ul>Despite a 6% surge in its <keyword id="44749" type="ORGANIZATION" weightage="20" keywordseo="Foreign-Direct-Investment">Foreign Direct Investment</keyword> (FDI) inflow in 2018, India slipped a spot in the list of countries receiving highest FDI, to 10th. The latest <a href="https://unctad.org/en/pages/DIAE/World%20Investment%20Report/WIR-Series.aspx">World Investment report</a> of the United Nations Conference on Trade &amp; Investment (<a href="https://unctad.org/en/Pages/Home.aspx">UNCTAD</a>), an organization that aims at maximizing trade, investment and development opportunities of developing countries. The increase in FDI inflows is being attributed to manufacturing, communication and financial services sectors, which were the top three FDI recipients in India. Growth in cross-border mergers and acquisitions -- from $23 billion in 2017 to $33 billion in 2018 -- was primarily due to retail trade, which includes e-commerce, and telecommunication, said the report. The $16 billion<a href="https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/walmart-acquires-flipkart-for-16-bn-worlds-largest-ecommerce-deal/articleshow/64095145.cms"> acquisition </a>of Flipkart by Walmart, and telecommunication deals worth $2 billion involving Vodafone and American Tower, were among the major deals this year. The report also highlighted the changes to India’s FDI policy, which it termed as “restrictive.” In February 2019, India introduced changes to its e-commerce sector where it banned foreign companies to sell their own products in e-commerce marketplace companies like Amazon. Global FDI slowdown Global FDI flows fell by 13% in 2018 from $1.5 billion in 2017 to $1.3 billion in 2018, which is the third consecutive annual decline, according to UNCTAD’s World Investment Report. The contraction was largely precipitated by United States multinational enterprises (MNEs) repatriating earnings from abroad, making use of tax reforms introduced by the country in 2017, designed for that purpose. Developed countries were the worst hit by the earnings repatriation, where flows fell by a quarter to $557 billion-levels last seen in 2004. South Asia surges ahead As global FDI inflows slump down, South Asia witnessed a <a href="https://economictimes.indiatimes.com/news/economy/indicators/fdi-flows-to-india-grew-6-in-2018-to-42-bn-un-report/articleshow/69761999.cms?utm_source=ETTopNews&amp;utm_medium=HP&amp;utm_campaign=TN&amp;utm_content=23">growth</a> of 3.5% to $54 billion in FDI inflows. "All subregions in developing Asia are expected to receive higher inflows. Prospects are underpinned by a doubling in value of announced greenfield projects in the region, suggesting continued growth potential for FDI," it said while sounding a note of caution on global uncertainties. It said uncertainties stemming from global trade tensions could weigh on the mood in the region.

India has slipped to the 10th spot in attracting foreign direct investment

New Delhi, Feb 7 () Total foreign direct investment in the drugs and pharmaceutical sector in the country rose to Rs 2,065 crore during April to September period of fiscal year 2019-20, Parliament was informed on Friday. The foreign direct investment (FDI) equity inflow in the drugs and pharmaceutical sector stood at Rs 1,842 crore in FY 2018-19, Minister of State for Shipping and Chemicals &amp; Fertilizers Mansukh Mandaviya said in reply to a question in the Rajya Sabha. FDI in the sector was at Rs 6,502 crore in 2017-18, Rs 5,723 crore in 2016-17, Rs 4,975 crore in 2015-16 and Rs 9,052 crore in 2014-15, he added. To attract larger FDI in the pharmaceutical sector, the government reviews FDI policy on an ongoing basis with a view to liberalise and simplify it progressively and improve the country's investment climate by providing ease of doing business, Mandaviya said. Also, various measures are taken under 'Make in India' initiatives facilitating investment, fostering innovation and thereby promoting robust business environment in the country, he added. "The drugs and pharmaceuticals sector is witnessing an era of unparalleled growth and innovation. Drugs and pharmaceuticals are India's largest sectors- both in terms of revenue and employment," Mandaviya said. The government amended the FDI policy on pharmaceutical sector in June 2016 by allowing 100 per cent FDI for greenfield pharmaceutical projects and up to 74 per cent FDI for brownfield pharmaceutical projects through the automatic route and beyond that through government's approval, he added. FDI is largely a matter of private business decisions and inflows depend on a host of factors such as availability of natural resource, market size, infrastructure, political and general investment climate as well as macro-economic stability and investment decision of foreign investors, Mandaviya added. AKT ABM

FDI in drugs & pharma sector rose to Rs 2,065 cr in April-Sept FY20: Govt

The government has permitted <keyword id="44749" type="ORGANIZATION" weightage="20" keywordseo="Foreign-Direct-Investment">foreign direct investment</keyword> (FDI) of up to 74 per cent under the automatic route in the defence sector with a view to attracting overseas investors, according to a press note issued by the DPIIT on Thursday. However, foreign investments in the defence sector would be subject to scrutiny on the grounds of national security and the government reserves the right to review any foreign investment in the sector that affects or may affect national security, the Department for Promotion of Industry and Internal Trade (DPIIT) said in the note. As per the current FDI policy, 100 per cent overseas investments are permitted in the defence industry -- 49 per cent under the automatic route, while beyond that government approval was required. According to the Press Note 4 (2020 series): "FDI up to 74 per cent under automatic route shall be permitted for companies seeking new industrial licences". It also said that infusion of fresh investment up to 49 per cent, in a company not seeking industrial licence or which already has government approval for FDI in defence, shall require "mandatory" submission of a declaration with the defence ministry in case change in equity/shareholding pattern or transfer of stake by existing investor to new foreign investor for FDI up to 49 per cent, within 30 days of such change. Proposal for raising FDI beyond 49 per cent from such companies will require government approval, it added. "The decision will take effect from the date of FEMA (Foreign Exchange Management Act) notification," it said. The decision to permit up to 74 per cent FDI in the <keyword id="2377476" type="PERSON" weightage="20" keywordseo="defence-manufacturing">defence manufacturing</keyword> through the automatic route was announced by Finance Minister Nirmala Sitharaman in May while announcing the fourth tranche of the Rs 20 lakh crore stimulus package for the coronavirus-hit economy. In July 2018, the government had relaxed foreign direct investment norms in the defence sector by allowing up to 49 per cent FDI under the automatic route. The move was aimed at boosting domestic industry as India imports about 70 per cent of its military hardware. According to the DPIIT data, defence industries has received FDI equity inflows of USD 9.52 million (Rs 56.88 crore) during April 2000 and March 2020. Under the government route, foreign investors have to take prior approval of the respective ministry/department, while in the automatic route, the investor just has to inform the RBI after the investment is made. Total FDI into India increased by 18 per cent to USD 73.45 billion in 2019-20. SEE ALSO: <a href="https://www.businessinsider.in/sports/news/dailyhunt-app-founders-confirm-ipl-2020-associate-sponsorship/articleshow/78169667.cms">EXCLUSIVE: Dailyhunt founders confirm IPL 2020 associate sponsorship — promise new release for Josh ahead of India’s biggest cricket tournament</a> <a href="https://www.businessinsider.in/stock-market/markets/news/hcl-tech-enters-the-list-of-top-10-most-valued-companies-in-india/articleshow/78165311.cms">HCL Tech enters the list of top 10 most valued companies in India</a> <a href="https://www.businessinsider.in/science/space/news/first-intact-planet-found-circling-a-dead-star-this-jupiter-sized-anomaly-is-in-orbit-rather-than-being-pulled-apart-at-the-seams/articleshow/78166938.cms">First 'intact' planet found circling a dead star — this Jupiter-sized anomaly is in orbit rather than being pulled apart at the seams</a>

Foreign investors can now pump in up to 74 % FDI under automatic route in India's defence sector

New Delhi, The government on Wednesday eased <keyword id="19946825" type="General" weightage="20" keywordseo="foreign-direct-investment" source="keywords">Foreign Direct Investment</keyword> (<keyword id="19946824" type="General" weightage="20" keywordseo="fdi" source="keywords">FDI</keyword>) norms in the space sector by allowing 100 per cent overseas investment in making components for satellites, as part of efforts to attract overseas players and private companies into the segment. The decision was taken at the <keyword id="19901283" type="General" weightage="20" keywordseo="cabinet" source="keywords">Cabinet</keyword> meeting chaired by Prime Minister <keyword id="19895781" type="General" weightage="20" keywordseo="narendra-modi" source="keywords">Narendra Modi</keyword>. Now, the satellite sub-sector has been divided into three different activities with defined limits for foreign investment in each such sector, according to an official statement. Presently, FDI in the space sector is allowed up to 100 per cent in the area of satellite establishment and operations through government route only. By changing the current policy, the government has allowed up to 74 per cent FDI under automatic route in satellites-manufacturing and operation, satellite data products, and ground and user segments. Beyond this limit, government approval will be required in these areas for FDI, it said. Up to 49 per cent FDI is allowed through the automatic route for launch vehicles and associated systems or subsystems, creation of spaceports for launching and receiving spacecraft. Beyond 49 per cent, FDI in these activities would require government approval, it added. Further, up to 100 per cent overseas investments are permitted under the automatic route for manufacturing of components and systems/sub-systems for satellites, ground and user segments. This increased private sector participation would help generate employment, enable modern technology absorption and make the sector self-reliant. It is expected to integrate Indian companies into global value chains. Through the decision, the government seeks to liberalise the FDI policy provisions in the space sector by prescribing easy entry routes and providing clarity for overseas investments in satellites, launch vehicles and associated systems or subsystems, creation of spaceports for launching and receiving spacecraft and manufacturing of space-related components and systems. With this, companies will be able to set up their manufacturing facilities within the country, duly encouraging Make In <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword> initiatives of the government.

Govt eases FDI norms in space sector; 100% in making components for satellites

The government is likely to give nod to a higher limit of foreign direct investment (<keyword id="44528" type="ORGANIZATION" weightage="100" keywordseo="FDI">FDI</keyword>) in <keyword id="6360676" type="CITY" weightage="100" keywordseo="Railways">railways</keyword> and <keyword id="32723" type="COMPANY" weightage="100" keywordseo="Defence">defence</keyword>. However, the plan to allow FDI in e-commerce has been put on hold. 
 
FDI up to 100% would be allowed under the automatic route in railway infrastructure projects, including projects like high-speed trains, sub-urban and dedicated freight corridors under public-private partnership (PPP) mode. 
 However, in strategic border areas, companies may need prior permission from the <keyword id="1382761" type="ORGANIZATION" weightage="100" keywordseo="Foreign-Investment-and-Promotion-Board">Foreign Investment and Promotion Board</keyword> (FIPB). 
“Due to security concerns in border areas, there is a view that clearance from the ministry of home affairs should be taken,” said an official. 
 
In defence sector, the FDI limit of 26% would be raised to 49%. 
 The <keyword id="120170" type="ORGANIZATION" weightage="100" keywordseo="Cabinet-Committee-on-Economic-Affairs">Cabinet Committee on Economic Affairs</keyword> has already approved 49% FDI in the insurance sector. 
 
But the government is unlikely to allow FDI in e-commerce as of now as it is of the view that it could impact domestic players.

FDI In Defence, Railways To Be Increased

Ratings agency Moody’s said <a href="http://www.businessinsider.in/searchresult.cms?query=prime+minister+narendra+modi&amp;sortorder=effectivedate">PM Narendra </a><a href="http://www.businessinsider.in/searchresult.cms?query=prime+minister+narendra+modi&amp;sortorder=effectivedate">Modi</a>’s ‘<a href="http://www.businessinsider.in/searchresult.cms?query=make+in+india&amp;sortorder=effectivedate">Make in India</a>’ initiative is bearing fruits and there is ample proof. 
 
Moody’s stated the net <a href="http://www.businessinsider.in/searchresult.cms?query=fdi&amp;sortorder=effectivedate">Foreign Direct Investment</a> (<keyword id="44528" type="ORGANIZATION" weightage="20" keywordseo="FDI">FDI</keyword>) inflows hit an all-time high at $3 billion in early 2016 since 2004. 
 
The basic balance (the sum of the current account balance and net FDI) returned to a surplus in 2015 after being in deficit from 2003 to end-2014. 
 "The rise in FDI points to stronger investor interest in India on the back of robust economic growth. Higher inflows also suggest that recent government policies, such as efforts to liberalize foreign investment limits in several sectors and the '<keyword id="6354869" type="UNKNOWN" weightage="20" keywordseo="make-in-India">Make in India</keyword>' initiative, are bearing fruit," stated the ratings agency in its report. 
 
Moody’s said that development initiatives such as building industrial corridors, setting up investment &amp; manufacturing zones and smart cities will further enhance investment inflows. 
 
"In particular, flows into the manufacturing sector are likely to accelerate as the government seeks to boost the sector's share of <a href="http://www.businessinsider.in/searchresult.cms?query=gdp&amp;sortorder=effectivedate">gross domestic product</a> (<keyword id="35050" type="CITY" weightage="20" keywordseo="gdp">GDP</keyword>) to 25% by 2022," the report added. 
 
"The strength of inflows reflects India's relatively strong growth prospects and government efforts to liberalize foreign investment regulation. 
We expect FDI inflows to continue to rise. Increasing FDI flows provide a stable source of financing that will help to mitigate India's external financing risks," the ratings agency said in a statement.

Moody’s gives thumbs up to Make in India as FDI on all-time high

<div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div><ul><li>Roughly 40% of foreign direct investment is "phantom capital" being used to avoid or pay lower corporate taxes, according to a new <a href="https://www.imf.org/external/pubs/ft/fandd/2019/09/the-rise-of-phantom-FDI-in-tax-havens-damgaard.htm" target="_blank" rel="noopener">study</a> by the IMF and University of Copenhagen. </li><li>While foreign direct investment can be beneficial to economies hosting money, using shell companies to pay lower taxes is "financial and tax engineering," according to the study. </li><li>Tax havens like Luxembourg hold the majority of phantom foreign direct investment, the study found. </li><li><a href="https://markets.businessinsider.com/">Read more on Markets Insider. </a></li></ul>About 40% of all foreign direct investment is "phantom capital" that's being used by multinational firms to pay lower corporate taxes, according to a <a href="https://www.imf.org/external/pubs/ft/fandd/2019/09/the-rise-of-phantom-FDI-in-tax-havens-damgaard.htm">new study by the International Monetary Fund</a> and the University of Copenhagen. That's about $15 trillion globally - or roughly the size of annual gross dometic product for China and Germany combined, the study showed. Phantom investment has picked up in the last decade, expanding to 40% of all FDI from 30%. That growth rate is faster than global GDP over the same timeframe. FDI, defined as "cross-border financial investments between firms belonging to the same multinational group," can be hugely beneficial to countries, the study said. Countries even have policies to attract it because of its ability to drive integration, stimulate growth, create jobs, and boost productivity in local economies. But phantom FDI - or investments that pass through empty corporate shells that don't do any real business - is "financial and tax engineering," blurs statistics, and makes it difficult to understand the true economic integration, the study said.<a href="https://www.surveymonkey.com/r/BI-Young-Investor-Panel" target="_blank" rel="noopener">Markets Insider is looking for a panel of millennial investors. If you're active in the markets, CLICK HERE to sign up.</a>The vast majority of phantom FDI is being held in well-known tax havens. Luxembourg and the Netherlands hold nearly half, the study showed. Add in Hong Kong, British Virgin Islands, Bermuda, Singapore, the Cayman Islands, Switzerland, Ireland, and Mauritius and more than 85% of phantom FDI is accounted for. Some countries attract phantom FDI, even luring foreign investment by offering benefits like low or no corporate tax rates. This is because even if shell companies pay little taxes and have few employees, they still boost local economies by buying tax advisory, accounting, and other financial services.They also pay registration and incorporation fees. In the Caribbean, these fees account for most of GDP, along with tourism. But overall, heavy investment in foreign empty shells could indicate that both domestically controlled and foreign multinationals are trying to avoid paying taxes, either to the host economy or the home economy. "Unsurprisingly, an economy's exposure to phantom FDI increases with the corporate tax rate," the study said.

A new study shows 40% of foreign investment is 'phantom capital' being used to avoid taxes

New Delhi, Dec 25 () The Department for Promotion of Industry and Internal Trade (DPIIT) is expected to soon issue a clarification on the issues raised by certain stakeholders over the government's decision to permit 26 per cent FDI in digital media sector, according to sources.
Certain industry players and experts have stated that the move to cap foreign direct investment (FDI) in digital media sector to 26 per cent throws up questions that need clarifications as some of those who were looking to raise funds could be restricted.
There are mainly two issues -- how the FDI policy of the sector would treat news aggregators and what would happen to those digital media companies where overseas investment is over 26 per cent -- that need clarification.
On these matters, the department is expected to issue clarification soon, a source said.
The DPIIT has already taken views of the Information and Broadcasting Ministry on the issue.
Deloitte India Partner Jehil Thakkar had said that clarity was needed on how to treat cases of television broadcasters that stream news online, but are allowed 49 per cent FDI.
"What happens to those, whether they qualify under 26 per cent or 49 per cent (FDI)? What happens to news websites which are 100 per cent foreign entity?" he said.
Internet and Mobile Association of India too had sought clarification on the issue.
In a representation to the DPIIT, it stated that the decision will have impact on startup ecosystem as continued FDI is critical to enable Indian digital media startups to achieve global scale.
"Several foreign strategic intermediaries have set up their operations in India, as digital media was categorized as 100 per cent FDI under the automatic route. A clarification on the non-applicability of the new FDI measure would be critical for them to continue making massive investments in India," it added. RR BAL

DPIIT to soon issue clarification on 26 pc FDI in digital media sector

NEW DELHI: The <keyword id="6355512" type="ORGANIZATION" weightage="20" keywordseo="Union-Cabinet">Union Cabinet</keyword> on Wednesday allowed foreign investment in the Railways for the first time and raised limit for such investment in the defence sector, steps intended to raise funds for expansion of the Railways and encourage domestic manufacture of arms. 
 
100 per cent foreign investment in railway infrastructure projects will be allowed while in the case of defence the limit has been raised to 49 per cent from the current 26 per cent, subject to the Indian owners exercising management control. 
 The <keyword id="44528" type="ORGANIZATION" weightage="20" keywordseo="FDI">FDI</keyword> hike in defence is intended to cut imports by indigenising defence production as India is one of the world’s largest arms importers. 
 "It is a composite cap, incorporating all forms of foreign investment, FDI, FII, FPI, NRI, etc," said a <keyword id="6542458" type="POSITION" weightage="20" keywordseo="Government-official">government official</keyword> confirming that the proposals has been cleared. Experts did not seem impressed with the cautious stance of the <keyword id="6360789" type="ORGANIZATION" weightage="20" keywordseo="Modi-Government">Modi government</keyword> on defence. 
 
"Good development, but not great. Round one has gone to protectionist forces. 49 per cent is the same as 26 per cent technically and hence may not open the investment floodgates," said Amber Dubey, Partner and India Head of Aerospace and Defense at global consultancy KPMG. 
 
"We hope better judgment prevails and we have the FDI limit enhanced to 74 per cent later this year," he added. Official notifications giving effect to changes will be issued soon, after the minutes of the cabinet meeting are finalised. 
 Foreign investment in defence will be though the approval route, implying it will have to be cleared by the Foreign Investment Promotion Board (FIPB). Though the 49 per cent cap will be general rule for the defence sector, 100 per cent overseas ownership will be allowed in case the <keyword id="6362476" type="ORGANIZATION" weightage="20" keywordseo="investments">investments</keyword> comes bundled with state of the art technology. Such investment proposals will have to be cleared by the Cabinet Committee on Security (CCS). 
 
In companies with a 49 per cent foreign holding, more than one Indian company will be allowed to hold the 51 per cent share, unlike the present norm that mandates that a single Indian entity should own and control the entire 51 per cent, a move that will encourage more domestic players to enter the sector. 
 
In case of Railways, 100 per cent FDI will now be allowed in railway infrastructure segments such as electrification, signalling, high speed and suburban corridors. 100 per cent FDI will also be allowed through the Special Purpose Vehicle route to provide last mile connectivity to ports and mines. Further, some railway operations have also been partially opened up to foreign investment. 
 FDI is now allowed in PPP projects, suburban corridors, high speed train systems, and dedicated freight lines. Estimates suggest that the opening of railways to foreign <keyword id="47916" type="UNKNOWN" weightage="20" keywordseo="invest">invest</keyword>ors will add 1-1.5 percentage points to the overall GDP growth. China and Japan are keen to invest in the railways sector. 
 
As a result of these changes, railways transport will be removed from the list of prohibited sectors in the consolidated FDI policy.

You Searched For "FDI investments" and got 11 results

Budget 2016: Impact of FDI in real estate sector and future expectations

Usha Rani Das

It becomes easy to invest in India with the abolishment of FIPB

Gaurav Sangwani

India has slipped to the 10th spot in attracting foreign direct investment

BI India Bureau

FDI in drugs & pharma sector rose to Rs 2,065 cr in April-Sept FY20: Govt

PTI

Foreign investors can now pump in up to 74 % FDI under automatic route in India's defence sector

PTI

Govt eases FDI norms in space sector; 100% in making components for satellites

PTI

FDI In Defence, Railways To Be Increased

BI India Bureau

Moody’s gives thumbs up to Make in India as FDI on all-time high

BI India Bureau

A new study shows 40% of foreign investment is 'phantom capital' being used to avoid taxes

Carmen Reinicke

DPIIT to soon issue clarification on 26 pc FDI in digital media sector

PTI

Indian Cabinet Approves Raising FDI Cap In Defence To 49 Per Cent, Opens Up Railways

ET

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